Iowa Automobile Insurance Plan – IA AIP

When you drive in the Hawkeye State, you are legally required to be covered by auto insurance. If your driving record includes accidents or DUIs, then getting auto insurance coverage in the “voluntary” - the regular auto insurance market where most drivers find coverage - market may be difficult. If you are refused coverage in the voluntary market because you are considered a high risk driver, Iowa offers the Iowa Automobile Insurance Plan (IA AIP) as a plan of last resort. All Iowa drivers must have coverage at least in the limits of 20/40/15.

What is the Iowa Automobile Insurance Plan (IA AIP)?

The Iowa Automobile Insurance Plan was formed to be Iowa's residual auto insurance market in 1969. This Plan was created to minimize the number of uninsured drivers on Iowa roads, making sure that all drivers can have access to insurance as long as they meet the plan eligibility criteria described below, regardless of their risk. In other words, when you have been rejected in the voluntary market, you can apply through the IA AIP for coverage.The Plan does not actually sell insurance policies, but instead assigns drivers to existing Iowa auto insurers, who must then provide you coverage for at least three years.All auto insurers in the state are required to participate in the plan, in order to share the costs of insuring high risk drivers equitably.

The actual number of drivers in the Iowa AIP has dropped over time, as insurers in the voluntary market have gotten better at balancing the risks and costs of insuring higher risk driver. But the IA AIP does remain as a “last resort” for drivers who are in need. The insurer of assignment is chosen based on their share of the total auto insurance market in Iowa.

Every licensed auto insurance agent and broker in Iowa can explain your coverage options through the IA AIP, and help submit your application.

Iowa Automobile Insurance Plan Eligibility

To be eligible for insurance through the Plan is relatively straightforward. You need both a valid driver’s license and a car that is registered in Iowa. You must also certify on the Iowa AIP application that you tried but were unable to find auto insurance in the voluntary market within the previous 60 days. Even if you received an insurance quote on the regular market that costs more than what the Iowa AIP would offer you, you may also be eligible to get coverage through the IA AIP. Be sure to fill out the application accurately. If important information is omitted or misrepresented, your insurer may find grounds to cancel your policy.

You may NOT be able to apply for coverage through the Plan if you have a record of not paying a previous auto insurance bill or if you don’t present your vehicle for inspection to an authorized insurance representative, as requested. Once you pay the overdue bill or show your car to the insurer, your application should be able to proceed immediately. If your insurer determines your application is not made in good faith, you may be refused coverage, and prevented from applying to the Iowa AIP for 12 months.

Iowa Automobile Insurance Plan Coverage

Coverage options are mostly the same between what you get through the Iowa Plan and what the voluntary market offers. But they may be more expensive. Your coverage will last for 3 years, once you are assigned an auto insurer. This is a good time to work on improving your driving record, so as to become eligible for the lower auto insurance rates.

You may reapply to the Iowa AIP for coverage at the end of three years, if you still can't find another auto insurance company to cover you on your own. You will find insurance, although it may be with a different insurer. Remember that drivers are assigned based on insurers’ market shares, not on your individual preference.

The table below shows the mandatory coverages that are available. You may buy the minimum coverage amounts for Bodily Injury and Property Damage, but that may not be the best choice, depending on what assets you have to protect. For a higher premium, you can get much higher amounts of coverage:

Mandatory Coverage

Iowa Required Min. LimitsIowa AIP Maximum Limits

Bodily Injury (BI)

$20,000 per person/$40,000 per accident$100,000 per person/$300,000 per accident

Property Damage (PD)

$15,000 per accident$50,000 per accident

Like any other Iowa insurer, Iowa AIP makes sure optional types of auto insurance are available to you as well. Additional coverage costs more, but they may be well worth having in case of accident. For example, Medical Payments will pay some medical bills regardless of who is at fault in an accident. On the other hand, physical damage coverage includes both Collision and Comprehensive that protects your car regardless of fault, but your assigned insurer does not have to provide this coverage if you fall under any one of these cases:

  • Your car is an antique – older than 25 years
  • Your car cost more than $25,000 brand new or
  • You fail to bring your car to an authorized insurance representative for a visual inspection.

Whenever you buy collision or comprehensive coverage, you must decide on what deductible to pay before coverage kicks in. When you are assigned through the IA AIP, your options are $100, $250 or $500. Usually a higher deductible gets you a lower premium. Here is a table illustrating the types and limits of optional coverage available through the IA AIP:

Optional Coverage

Iowa AIP Min. LimitsIowa AIP Maximum Limits

Medical Payments Coverage

$1,000 per person per accident$5,000 per person per accident

Physical Damage (Collision and Comprehensive)

actual cash valueactual cash value up to $25,000

Uninsured Motorist Bodily Injury

$20,000 per person/$40,000 per accidentnot to exceed BI limits

Uninsured Motorist Property Damage

$15,000 per accidentnot to exceed PD limits

Iowa AIP Premiums and Payment Plans

Generally speaking, auto insurance premiums are higher for Iowa drivers who are considered “high risk.” But there is no specific rule for how much higher. Premium quotes can vary widely from insurer to insurer, and it pays to shop around. There are many factors that insurers consider in evaluating you as a risk and pricing your insurance.

By understanding how the insurance companies look at you, you are in a better position to make changes that could reduce your premiums.

You can pay your insurance premium in one of three ways. First is to pay the entire annual premium at the time you submit your application. Your insurance agent may require this if you have a spotty record of paying auto insurance premiums in the past. Second is to pay 30% of the entire annual premium up front, and the entire balance within 30 days of receiving your policy. The final way is an installment plan. This method requires you to pay 40% of the entire premium when you apply, and then the remainder will be paid in 5 equal monthly installments, plus a $4 service fee. Depending on your financial situation and cash flow needs, you can talk with your insurance agent about which plan works best for you.

If you do pay over time, be sure to pay ON time. There is no grace period for auto insurance, so if your payment is late, the insurer may kick into “automatic cancellation” mode, and that’s a hassle you want to avoid.

How to Apply for the Iowa Automobile Insurance Plan

As mentioned above, every licensed auto insurance agent or broker in Iowa must know about – and be able to help you apply for – auto insurance through this Plan.

To learn more about Iowa’s Automobile Insurance Plan, you can contact the Iowa Insurance Division at 1- 877-955-1212.

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